Real (Estate) Negotiations Stories #4: The Million-Dollar A/C Dispute

Fernando Levy Hara, AMDP ’09, leverages his decades of experience in real estate in Real Estate Negotiation Essentials: Dealmaking Techniques & Simulation, where participants learn impactful real estate negotiation techniques and immediately apply them in an online dealmaking simulation.

One of our most popular and entertaining instructors, Fernando reinforces his session teachings with personal stories. We wanted to share some of those stories to preview the program in this multi-part series.

Years ago, I built a condominium office building in Aventura, FL. The building uses a central cooling tower on the roof to provide chilled water to individual AC units, which then produce cold air for the offices.

As president of the condo board for several years, I encountered many challenges, but one, in particular, stood out. Dr. K., one of the office owners, filed a claim about his AC, alleging that the cooling tower was supplying dirty water to his unit. He claimed this was clogging his system, causing leaks, moldy air, and insufficient cooling. His proposed solution? The condominium should replace the cooling tower—an $800,000 expense—and install a high-end filtration system for another $140,000 to ensure he would “never have problems again.”

No other office owners reported similar issues, so we hired an independent consultant to investigate. A few weeks later, the report came back: the issue stemmed from a filter Dr. K. himself had installed in his AC unit. This filter was trapping debris inside his pipes, causing all the problems he complained about.

When we presented the findings to him, he outright denied them. He insisted the filter was a temporary measure to alleviate the issue. Frustrated, he filed a lawsuit against the condo association. This wasn’t surprising—Dr. K. was known for his bad temper and bullying tactics. He had been a difficult presence in the building since the day he moved in. He was also known as a control freak.

The case proceeded to pretrial mediation, where I represented the condo association alongside our attorney. Also present were Dr. K., his lawyer, and the court-appointed mediator. Despite our attorney presenting clear forensic evidence, Dr. K.’s lawyer kept dismissing it.

For five long hours, we were stuck in a loop. Dr. K. attempted to manipulate the discussion, even resorting to tears. He dramatically claimed his wife had developed lung disease due to mold exposure and repeatedly insisted, “I just want clean water.”

Through my years of negotiating deals, I had learned that asking the right questions can reveal what the other party truly wants.

I turned to him and said, “Dr. K., I’m truly sorry about your wife’s condition. Can you clarify—what exactly do you want?”

Again, he repeated, “I want clean water.”

That’s when I changed this dynamic by shifting the perspective: “Oh, I thought you wanted cold, dry air inside your office. Isn’t that correct?”

He hesitated before answering, “Yes, of course. It’s the same thing.”

“Not really,” I responded. “If your goal is cold, dry air, let’s explore other ways to achieve that.”

I proposed a solution: The condo association would install an independent AC system exclusively for his office, completely separate from the central cooling tower. This unit, like a traditional HVAC system, would use refrigerant gas instead of water, giving him full control over his climate without relying on the condo’s infrastructure. More importantly, this alternative would cost the association around $80,000—far less than the million-dollar solution he originally demanded.

Dr. K. was caught off guard. He became defensive, searching for reasons to reject the offer. At this point, the court officer, growing impatient, asked him bluntly, “Dr. K., do you REALLY want to resolve this?”

Realizing he had little ground left to stand on, he shifted his tone. The rest of the mediation focused on finalizing details: Who would cover annual maintenance? Who would pay for the electricity? Where would the compressor be installed? Eventually, we reached an agreement.

When we face problems that seems not to have a solution and we feel that the negotiation is deadlocked, it’s easy to get stuck in the details. But as William Ury teaches, when faced with an impasse, the best approach is to step back, view the situation with fresh eyes, think outside the box and look for innovative solution.

About the Program

Real Estate Negotiation Essentials: Dealmaking Techniques & Simulation

This focused program, taught by a real estate developer and expert cross-border dealmaker, distills negotiation best practices into an easily applicable form for real estate professionals.

Learn negotiation dynamics to prepare yourself – on behalf of your organization or client – to understand parties’ respective interests, claim and create value, and resolve differences to close a deal – and bring your vision to life.

Dates: April 4, 7, & 9, 2025
Location: Online
Tuition: $1,400